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FTC sues to block NVIDIA purchase of ARMs – TechCrunch

NVIDIA’s plan to acquire ARM has just hit a major stumbling block. The Federal Trade Commission has filed a lawsuit to block the merger over concerns that the $ 40 billion deal “stifles” competition for several technologies, including data centers and car computers. ARM is a “critical entry” that fosters competition between NVIDIA and its competitors, the FTC said, and a merger would give NVIDIA a way to “undermine” these challengers.

The FTC was also concerned that NVIDIA could gain access to sensitive information of ARM licensees. The merger could reduce the incentive for ARM to develop technology that could defeat NVIDIA’s business goals, officials added. The administrative trial is due to start on August 9, 2022.

The company did not appear to be bothered. NVIDIA called the lawsuit the “next step” in the FTC process and repeated its arguments in favor of the buyout. The acquisition would “speed up” ARM’s product plans, foster more competition and still protect the chip architecture designer’s open licensing model, according to NVIDIA. You can read the full statement below.

Despite the claims, an FTC lawsuit is a huge problem for NVIDIA. The Commission takes legal action like these when it finds that a company is breaking the law – concessions may not be enough. It also comes after the European Commission launched an investigation into the purchase in October. NVIDIA faces questions from major regulators who are clearly wary of the acquisition, and those agencies might not take the answers.

As it stands, the competition from NVIDIA is probably not happy. Qualcomm reportedly objected to the ARM deal in its communications with the FTC (among other agencies) for fear that NVIDIA would refuse to grant design licenses. And when heavyweights like Apple, MediaTek, and Samsung also depend on ARM, the rest of the market is unlikely to be enthusiastic. At the very least, the lawsuit would likely delay the union’s closure beyond NVIDIA’s initial target in 2022.

As we enter this next stage of the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition. NVIDIA will invest in Arm’s R&D, accelerate its roadmaps, and expand its offerings in ways that drive competition, create more opportunities for all Arm licensees, and expand the Arm ecosystem. NVIDIA is committed to preserving Arm’s open licensing model and ensuring that its IP is available to all interested licensees, current and future.

Editor’s Note: This article originally appeared on Engadget.

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